Why Now Is The Perfect Time To Buy Standard Chartered PLC, Old Mutual plc & Royal Bank Of Scotland Group plc

Standard Chartered

Although the Asian economy is perhaps growing at a slightly slower pace than many investors expected, it still has huge long-term potential. That’s a major reason why Asia-focused bank, Standard Chartered (LSE: STAN) (NASDAQOTH: SCBFF.US), seems to be well-worth buying at the present time, as demand for new loans is forecast to grow significantly in Asia over the long run.

This should equate to higher profitability for Standard Chartered but, despite this, market sentiment is relatively weak. This is evidenced by a valuation that seems to be difficult to justify, with Standard Chartered currently trading on a price to earnings (P/E) ratio of just 8.8. As a result, there is considerable scope for an upward rating, especially as Standard Chartered’s profitability is all set to head north over the medium to long term. Therefore, now could be a great time to buy a slice of the bank.

Old Mutual

While 2014 was something of a disappointment for Old Mutual (LSE: OML), the next two years are set to be much better for its bottom line. That’s because, while a fall in earnings of 11% is expected to be reported for last year, the insurer is all set to grow its bottom line by 17% this year and by a further 11% next year.

Despite this impressive forecast growth rate, Old Mutual trades on a very low valuation. For example, it has a P/E ratio of just 12.4 which, when combined with its excellent growth prospects equates to a price to earnings growth (PEG) ratio of just 0.6. This points to growth being on offer at a very reasonable price and, in addition, a yield of 4.3% means that the company is a very appealing income stock, too.

Royal Bank of Scotland

While the banking sector is hardly popular at the present time, with investor sentiment being relatively weak due to the various fines that have been handed out by regulators, RBS (LSE: RBS) (NYSE: RBS.US) has seen investor sentiment improve during the past year. For example, its shares have risen by an impressive 14% in the last twelve months and, looking ahead, there could be more to come.

That’s because RBS continues to trade on a very low valuation. For example, it has a price to book (P/B) ratio of just 0.7 which, at a time when its future prospects have not been as bright in around eight years, seems difficult to justify. As such, it would be of little surprise for there to be a continuation of the upward rerating adjustment to RBS’s share price that has taken place in the last year.

And, with RBS set to yield 2.9% in 2016, it could begin to attract attention from income investors, too, thereby improving investor sentiment still further.

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Peter Stephens owns shares of Old Mutual and Royal Bank of Scotland Group. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.